Editor’s note: This is the last of a three-part series looking at the opportunity of biofuels and new sources farmers can provide.

The number of American farms today is a mere fraction of what it was back in the era of the small farmer—even as the demand for milk, meat, cheese and eggs continues to rise. So while we have far fewer farms, we certainly do not have fewer animals. The arrival of the Concentrated Animal Feeding Operation (CAFO) also coincided with the onset of stringent environmental regulations. First came the Clean Air Act and Clean Water Act of the 1970s; then, starting in 2003, the government created 16 agriculture-specific environmental regulations, which put the onus on farms to reduce methane emissions and fertilizer and manure runoff.

Legally, the EPA now classifies CAFOs as “point source” pollution. Consequently, the roughly 8,000 permitted CAFOs in the United States are now as heavily regulated as power plants and factories. Rising public concern over CAFO and other ag-related pollution means the regulatory noose is bound to tighten further. So while farmers have plenty of “carrots” motivating them to explore the potential profitability of converting ag waste into energy (see our previous two articles), the “sticks” here are worth considering as well.

When anaerobic lagoons burst, the public outrage puts strong pressure on regulators to crack down on farms. By contrast, converting ag waste into energy reduces such risks while giving farmers positive stories to tell. Go to YouTube and you can already see examples of self-sustaining farms that run completely off the energy produced by the likes of gasifiers or biodigesters. Circulating fluidized bed boilers are being used to dispose of waste wood and generate power that can be sold to the grid. Other approaches involve capturing the methane from anaerobic lagoons and funneling this gas directly into power generators, reducing waste.

Investment needed

Does this mean creating such programs is easy or cheap? Certainly not. Setting up the technology involves planning and investment. Fortunately, there are ways to offset some of these costs. The new farm bill, for one, sets aside $881 million over the next 10 years to help farmers leverage alternative energy. Regulatory compliance also is complex and involves consulting with legal experts to win approval for designs and plans for remedial measures. After setup, operation of the new system also entails data gathering, documentation and certification. However, the regulatory structure here happens to be favorable.

While the regulations were formulated at the federal level, more accessible state officials tend to enforce them. Farmers can also consult with experts at local colleges and universities. For example, the Rutgers (NJ) EcoComplex is a wide-ranging collaboration of academics, government officials and businesspeople focused on this issue. Another university in the Southeast has a goal of being completely “off the grid” by 2020 with a portion of its future power supply coming from ag wastes converted into energy. Likewise, your local university might be a valuable resource.

Running afoul of the government can be one of life’s worst nightmares. Unfortunately, many U.S. CAFOs are on a collision course with regulators. And so the up-front investment required to launch an energy program should be weighed against the cost of staying the same. New approaches represent a win-win for farmers—cutting both waste and risk while boosting the bottom line.

Roy M. Palk, Esq., is senior energy adviser for LeClairRyan and the former president and CEO of East Kentucky Power Cooperative. He can be contacted at Roy.Palk@LeClairRyan.com.